Online Poker Laws: The Lay Of the Land

Let’s cut to the chase. The sad truth is that the majority of US poker players are still unable to play the beautiful game for real money. However, many things have happened since Black Friday that have led to important hearings taking place today, giving the potential for more exciting developments to come throughout 2017.

So what exactly is happening right now in the three states to have legalized online poker? And what could 2017 have in store for other states?

How things look today

When the Department of Justice relaxed its stance on online gambling in 2012, it might have come as a surprise to see that Delaware, not Nevada, became the first state to reinstate legislated online poker. However, Nevada – home to Las Vegas and therefore the nation’s gambling capital – wasn’t far behind.

New Jersey followed suit, and to this day the three remain the only states out of the 50 where poker players can ply their trade and try their luck for real money.

Sites powered by 888.com are currently the only sites available in Delaware. The state’s three racinos (casinos with a race track) – Delaware Park, Dover Downs and Harrington Raceway – each have their own downloadable poker client; software very recognizable to any user of 888.com.

As of right now, WSOP.com is the runaway market leader in Nevada. The Caesars Interactive Entertainment site has flourished, both due to its quality offering (also powered by 888.com) and its recognizable branding and cross-branding with the annual World Series of Poker.

However, 888.com’s All American Poker Network (APPN) will soon be available in Nevada too, having signed agreements with the Wynn Casino and Treasure Island Casino.

It’s been almost a year since the world’s biggest online poker room, PokerStars, returned to the US. While the Isle of Man based site couldn’t get a license for Nevada (due to a clause imposing a five year ban on all sites which took bets in the US after December 31 2006), it was not restricted from New Jersey, launching PokerStars NJ on March 21st 2016. When February 21st 2018 rolls around, PokerStars will be able to apply for a Nevada license too.

It’s the garden state that currently has the most options for poker players, with PokerStars NJ, partypoker, 888.com, WSOP.com and Borgata Poker all available. However, the major issue is of player liquidity; the New Jersey market alone isn’t the biggest, so in the future we’ll likely see the three legal states syncing up their player pools in order to sustain the individual markets.

What could happen in 2017?

Pennsylvania

Pennsylvania is the state most likely to legalize online poker this year. A new white paper, published in February by playpensylvania.com, highlighted the significant annual revenue projections for online poker in the state.

Almost half a billion dollars in tax revenue could be realized in just over five years, according to the report, which also projects annual revenue for Pennsylvania online gambling of $230 million in 2018 climbing to $364 million by 2022.

Online poker alone is projected to contribute $41 million to annual revenue in 2018, dropping to a still healthy $35 million by 2022.

The Pennsylvania House and Senate met on Tuesday March 7th 2017 for a hearing to discuss the expansion of online gambling. It has taken a long time for this hearing to happen, and yet now is arguably the perfect time for it. Pennsylvania is currently suffering from a budget crisis, and will be looking for new ways to generate revenue. Legalizing online gambling in the state is one way to help deflate that crisis.

California

Another much-talked about state when it comes to online poker is California. Efforts have been made every year since 2008 to have an online poker bill passed, including four introduced in 2015, but none have made it through yet.

The state’s stakeholders include the union-backed horseracing industry, and Native American tribes that remain divided over the potential licensing of giants like PokerStars. According to Sacramento insiders, a bill “requiring the support of two-thirds of legislators will not make it to the governor’s desk without consensus from the 16 politically powerful tribes.”

There are 111 federally recognized tribes in California, with around 60 operating casinos that generate an annual $8 billion in gross revenues, onlinepokerreport.com reports.

It seems that in 2017, other forms of online gambling such as Daily Fantasy Sports and esports are higher up the pecking order. However, Steve Stallings, chairman of the California Nations Indian Gaming Association (CNIGA), said: “You incrementally get to other forms of online betting through poker,”, so legalizing online poker may have to be the first step. That’s a long shot for 2017, but it could certainly happen over the coming years if agreements can be made.

Michigan and New York

Other states to watch include Michigan. The Michigan Senate Regulatory Reform Committee held an online gambling hearing on March 8th 2017, one which allegedly demonstrated how friendly online gambling can be to the state’s casinos. However, Michigan now has a history of building excitement through bill progression, before leaving them to gather dust. What could happen this time around remains to be seen.

New York had reason to be excited earlier this year, when state assemblyman Gary Pretlow offered a positive outlook for online gambling in a recent interview. Previous concerns, such as the potential for cheating, seem to have been resolved. Two identical bills currently sit in both the Assembly and the Senate, and both will need to be passed. However, it’s highly unlikely anything will change in 2017.

What about Canada?

According to poker writer Matthew Brown, from OnlineGambling.ca, "Online poker in Canada is often called a ‘grey area’, however there’s currently no real risk of anything changing. Poker players can play on all the major sites, thanks to each Canadian province determining its own rules for gambling.’’

Some provinces, like BC and Quebec, even operate state-run gambling sites although the general consensus is that they pale in comparison to more established overseas rooms.

Ironically, Canada has its own gaming jurisdiction – the Mohawk Territory of Kahnawake, outside Montreal – which issues licenses to many overseas gambling websites. But with some operators deciding to leave the grey area, could Canada decide to fully legalize?

The issue is of the legality of offshore operators taking bets from Canada, but players themselves needn’t worry. As Michael Lipton, a lawyer and gaming law expert with Dickinson Wright in Toronto, told cbc.ca: "As far as I’m concerned, you as a player aren’t committing any criminal offence by being in a position where you are engaged with an offshore operator playing poker, playing slots, or whatever the case may be.”

Trump and RAWA

With a new president in the White House, RAWA – the Restoration of America’s Wire Act – is once again a hot topic. Largely driven by casino mogul Sheldon Adelson, who is worried that online gambling will diminish his already enormous profits (he’s worth $33.6 billion), the RAWA will make all online gambling illegal in the US, regardless of individual state legislation such as in Delaware, Nevada and New Jersey.

But will Donald Trump go for it? Well, Adelson donated $20 million to the Senate Republican Leadership Fund, and the next day a new senate bill virtually identical to RAWA was introduced. Trump himself has owned casinos in the past, but his stance on online gambling is yet to be seen.

According to the washingtontimes.com: “If RAWA were exposed to public debate, it would wither and die.”

Let’s hope that’s the case.

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